Why Birmingham is the Next Investment Hotspot for Investors

Investment in the UK’s second city shows no sign of abating – in fact, the recent string of announcements would suggest that things have moved up a gear, with Birmingham chosen as UK’s preferred host for the 2022 Commonwealth Games and the devolution deal, securing funding for transport and infrastructure projects for Birmingham. 

With its excellent connectivity, educational establishments, and world-class leisure, retail, and entertainment offering, it will also come as no surprise why Birmingham is attracting interest from even the most seasoned property investors. 

Below are the top 5 reasons why Birmingham is becoming a hotspot for investors.

Unrivalled access by Road, Rail and Air

Birmingham is one of the most well-connected cities in the UK. Outside of London, Birmingham New Street is the busiest station and is also the central hub of the British railway system due to its location in the midlands. 

It is also the sixth-busiest railway station in Great Britain by annual entries and exits. Commuters and professionals can travel from Birmingham to London, Liverpool or Manchester in less than 90 minutes and 90% of the population can reach Birmingham in under four hours. 

The arrival of the “High Speed 2“(HS2) is expected to transform the city’s transport infrastructure, linking Birmingham to London in just 49 Minutes. 

Birmingham Airport currently provides an access and exit point for 25 million passengers each year with flights to most European destinations as well as several long-haul destinations. It will become the only high-speed connected airport in the UK in 2026 with granted expansions plans to add a new runway, enabling passenger numbers doubling to 50 million by 2050. 

Demand is driving Home Prices up faster than any other city

Between 2015 and the start of 2019, property prices in Birmingham increased by 15% and current projections suggest there will be a further increase of 15.9% over the next five years. The population of the city is also rising, and by 2039, it is expected that an additional 171,000 people will live in Birmingham, taking the city’s population to 1.3 million. 

To support Birmingham’s growth and ensure housing requirements are tied back to its employment hubs, the Strategic Housing Market Assessment (SHMA) sets the annual housing needs at 4,057 new homes per annum. In reality, the delivery of homes each year is well short of that and is not sufficient to support the number of families moving to Birmingham each year. 

UK’s Second City and its “Rental Generation”

There’s a good reason for it. Birmingham has been named as the city with the highest standard of living among all UK regional cities. It is currently Europe’s youngest city and ~46% of its population is under 30. With a vast pool of young talent, Birmingham has consistently delivered strong economic growth and performance and is one of the strongest performing economies in the UK, exceeding the average growth rate for the UK. 

Its growth has been fueled by a growing youth population with it currently retaining 49% of its students upon graduation, the second highest proportion outside London. 

Birmingham is also the UK’s second largest student population with the Top 20 universities less than an hour’s drive away. The growing student population generates steady tenant demand for many of its investors. In 2017, there was a record-breaking 21,768 purpose-built student accommodation for Birmingham students. 

From a rental perspective, many of the current generation also belong to the “Rental Generation” choosing to rent instead of saving up for a home. ~18% of the current population is in rented accommodation and that figure is set to grow in the next decade. Therefore, the rental outlook for Birmingham remains strong with the city expected to see a 17% rental growth by 2021. 

Education, Culture & Entertainment Hub

Dubbed as the British centre of culture and sport, Birmingham is home to 2 of the country’s oldest professional football teams – Aston Villa FC and Birmingham City FC. It now looks to expand its prowess as the host of the 2022 Commonwealth Game. Aside from the sports scene, Birmingham is home to many art galleries and museums. For the foodies out there, there is a vast array of boutique cafés, award-winning restaurants and pubs catering to every budget and cuisine. Birmingham is truly a vibrant city with endless activities. 

Opened in 1976, The National Exhibition Centre – NEC has hosted major exhibitions and concerts, has been the home of the annual Horse of the Year Show since 2002.

The NEC site is within a three-hour drive of 75% of the UK’s population and post 2026, a high-speed rail station which will connect us to London in 38 minutes. To add on, the NEC campus has become a 24/7 destination, with shops, hotels, bars, restaurants and a casino as well. 

Strong Investment and vibrant workforce

One of the most high-profile investments into Birmingham was the relocation of the HSBC UK Head Office to Birmingham. 

This is no surprise as Birmingham has been chosen as the most investable city in the UK by PwC (2016) and has seen more inward investment as compared to other UK regions. The vast pool of talent available in Birmingham from its large base of student population has seen it attract major companies such as Deutsche Bank and even PwC to relocate some of their operations to the city. 

What is fueling this demand is a combination of major global companies and the wave of professionals that are choosing Birmingham over London as they do not need to compromise on career prospects or quality of life. 

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